Credit Score Increase - With Additional Bankcards?

Question

I receive a Credit Alert monitoring report that informs me when my score either increases or decreases. One of the things that I get dinged on haing too few premium bankcard accounts. Right now I only have two. What is the optimal number and what is defined as premium? Are there different tiers? I have two platinum cards, but apparently that is not enough. Wondering what the sweet spot is.

Answer 1

It's all relative.  The report is going to give you reasons for your score being lower than it could be even if those reasons have little impact.  The best way I can explain it in simple terms is that the report has to come up with something.

So, what is your credit score?  Is it higher than 720?  You probably don't have to worry much, if it is.  Is it higher than 750?  Then, there isn't much you can do to make it higher, other than having almost no debt, and it doesn't much matter if your score is 750 or 780.  You're primo at that point!

Premium is whatever the lender reports.  Generally, it means having a platinum card or better.  Visa "Signature" is considered a premium card more prestigious than Platinum or Gold; I'm not sure what label MasterCard puts on their premium card.  Guess that "platinum" has lost its luster.

Even more important, what is your outstanding debt to credit limit ratio?  Add up all your credit card debt and divide that by the total amount of credit lines you have.  The percentage shouldn't be higher than 30%.  If it's less than 10%, even better!

If your debt to credit limit ratio is higher than 30%, then apply for one or more cards and try to be qualified for platinum or better.

Keep your applications within a two-week time frame.  If the lender type is the same, and you stick to two weeks, it only counts as one hard inquiry on your credit history.

Answer 2

optimum is 3.75

Answer 3

I have found that people with the highest fico scores (800+) tend to have three credit cards, one mortgage and one car loan - and of course, no late payments.

People don't realize that having a credit card, but not used, counts slightly against your credit score.

What you want to do ideally is use your credit cards up to (but not over) 10% of your credit maximum, and pay off the cards each statement period. It definitely helps your scores.